The Multi Donor Fund for Aceh and Nias(MDF) and the Java Reconstruction Fund (JRF) have playedsignificant roles in the remarkable recovery of Aceh, Niasand Java, following some of the worst disasters in Indonesiain recent years. The MDF and the JRF, which is patternedafter it, are each considered a highly successful model forpost-disaster reconstruction. This paper discusses the valueof a phased approach to post-disaster reconstruction as asuccessful means to manage short-term expectations whiledelivering long-lasting, results of high quality. Thenatural disasters of late 2004 and early 2005 left a trailof human loss and destruction in Aceh and Nias. In such ascenario, capacity building efforts related to individualand community level investments yielded large returns. Acehand Nias have emerged from the reconstruction experience ina better position to address these challenges as a result ofthe capacity building achieved through the recovery process.